The USG + U.S. Chamber of Commerce Commercial Construction Index, a quarterly economic index designed to gauge the outlook for the commercial construction industry, says in its Q2 2018 report that more than 90 percent of contractors are concerned over labor shortages.
Concerns increased quarter-over-quarter, with 47 percent of respondents expecting problems finding skilled workers to worsen in the next six months, according to the report.
“Contractors’ pipelines for new business are consistently healthy, however, that optimism is challenged by a growing shortage of workers – a trend that’s persisted for more than a year,” said Jennifer Scanlon, president and chief executive officer of USG Corp. “In order to sustain the strong pipeline of work, it’s important that industry leaders think about process and product innovations that can help complete projects on-time and advance the industry.”
Meanwhile, contractors are also concerned about steel prices. The percentage of contractors concerned about fluctuations in steel prices jumped significantly this quarter. Two-thirds, or 63 percent, of contractors identified steel fluctuations as their top material of concern, a sharp increase from the 30 percent of contractors who expressed concerns in Q2 2017 and the largest fluctuation in contractor sentiment to date. Most contractors, or 86 percent, also feel the recently-imposed tariffs will have at least a moderate impact on their business.
“The commercial construction industry is vital to the growth of the U.S. economy. Steel and aluminum tariffs and continued workforce shortages threaten to slow the industry’s growth and job creation,” said Thomas Donohue, president and CEO of the U.S. Chamber. “We must embrace free enterprise, rather than undermine the competitiveness of American business, as well as invest in a skilled and motivated workforce to ensure our companies and job seekers alike have the platforms to compete on a global scale.”
Overall, contractors maintained a strong national economic outlook in Q2, with a steady level of new business confidence and revenue expectations. The Q2 2018 composite score was 73, down one point from Q1 2018, but reflective of a consistent sentiment of health in the sector. The index looks at the results of three leading indicators to gauge confidence in the commercial construction industry – backlog levels, new business opportunities and revenue forecasts – generating a composite index on a scale of 0 to 100 that serves as an indicator of health for the contractor segment on a quarterly basis.